December 2012, the Loan Agreement for extending micro, small and medium enterprises credit line (MSME) for the amount of USD 20 million equivalent was signed between the European Bank for Reconstruction and Development (EBRD) and Belgazprombank.
Part of the facility is provided by the EBRD through a synthetic BYR loan hedged by the Currency Exchange Fund(TCX). Thus, Belgazprombank has become the first bank in the Republic of Belarus to use this new instrument for raising local currency funds from a foreign investor.
This EBRD loan will diversify the funding base of Belgazprombank in local currency and decrease the currency risks of the bank’s clients, given the high volatility of the local currency exchange rate.
“We highly appreciate the support provided by the European Bank for Reconstruction and Development, - said Sergey Shaban, the Deputy Chairman of the Board of Belgazprombank. – “This is already the sixth credit line extended to Belgazprombank for on-lending to small and medium enterprises. And, of course, this Facility, which provides access to local currency, is of particular importance for us and our customers. Belgazprombank is planning to further develop and optimiseits local currency funding base, not only to ensure the demand for loans, but also to protect its customers from currency risks in the conditions of high turbulence of the currency exchange market.
Belgazprombank started cooperation with EBRD in 1997. Currently it is one of the main partners of EBRD in the Republic of Belarus and accounts for significant proportion of utilization of funds provided by the EBRD to local banks under its MSME program. Following signing of current Loan Agreement, the total amount of Credit lines extended by EBRD to Belgazprombank exceeds USD 75 million.
Belgazprombank also actively cooperates with EBRD under the Trade FacilitationProgramme. The limit available to Belgazprombank under this Programmewas twice increased by EBRD this year and has now reached USD 60 million.
In Belarus, the EBRD focuses on promoting private businesses, MSMEs developing the banking sector and improving critical infrastructure. In 2012 alone, the EBRD has so far invested over €25 million (excluding trade facilitation) in the country’s financial sector, while in total over the whole period of its operations in Belarus, the EBRD has committed over €1.03 billion in various sectors of the Belarusian economy.
Belgazprombank, established in 1990 and controlled by Russia’s Gazprom Group, occupies a leading position in lending to the Belarusian private sector, particularly to SMEs and the retail sector.
